QUESTION EIGHT

IAS 37 Provisions, Contingent Liabilities and Contingent Assets outlines the accounting for provisions (liabilities of uncertain timing or amount), together with contingent assets (possible assets) and contingent liabilities (possible obligations and present obligations that are not probable or not reliably measurable). 

Required: 

(a) Define Provisions, Contingent Liability, and Contingent Assets and critically evaluate how IAS 37 improves consistency in financial reporting.

(b) Highlight and explain five key points in favour of the adoption of accounting standards for Provisions, Contingent Liabilities and Contingent Assets.